Mark Farmer, chief executive of Cast, who led the review, said businesses that buy construction work but don't invest in innovation or skills in the sector should be taxed.

The report also recommends that the government invest in off-site construction methods and give planning breaks to companies using pre-manufactured methods of construction.

Farmer said: "If you buy a new car, you expect it to have been built in a factory to exacting standards, to be delivered on time, to an agreed price and to a predetermined quality.

"This needs to happen more in construction, so that the investors, developers or building owners hiring construction firms increasingly dictate the use of modern methods of delivery and invest appropriately in the skills agenda to grow this part of the industry."

The report was commissioned by the department for business, energy and industrial strategy alongside the department for communities and local government.

Industry minister Jesse Norman said: "This government is determined to support more housebuilding, more quickly and in the places people want to live. Given the launch of the £3bn Home Building Fund, Mark Farmer’s important review in this vital sector is very timely.

"It makes a strong case for change in the industry, identifies areas where it needs to improve, and sets out areas for action. We will now carefully consider his recommendations."